Senators To HHS Secretary Thompson: Government Drug Price Negotiation Should Be Used More Broadly

Washington, DCU.S. Senators Tim Johnson (DSD) and Charles Schumer (DNY) today requested that the Department of Health and Human Services (HHS) work with Congress to negotiate lower prices for prescription drugs in the Medicare program. The Senators urged Secretary Tommy G. Thompsons assistance in repealing language in the Medicare prescription drug benefit law that expressly prohibits the Secretary from negotiating lower drug prices.

Secretary Thompson recently approved a plan that will allow 5 states to form a multistate purchasing pool to negotiate for lower prescription drug prices for more than 900,000 Medicaid recipients. The five states Michigan, Vermont, New Hampshire, Alaska and Nevada estimate that the program will save them a total of more than $12 million in 2004. The Senators called on HHS to support similar governmental negotiations for Medicare.

We have already seen the ability of the federal government to negotiate lower prescription costs, the Senators said in a letter to HHS Secretary Tommy Thompson. These actions and your expressed support for the multistate purchasing pool would indicate that you believe governmental drug price negotiation is an effective tool in reducing the cost of prescription drugs.

If the Secretary will allow purchasing pools for Medicaid, he should allow them for Medicare, added Johnson. Americas seniors should not have to choose between paying their bills and buying their medicine.

This is yet another recognition by Secretary Thompson that negotiation can lower drug prices, Schumer said. If 5 states can pool together to reduce costs, imagine what the federal government could save if we leveraged our buying power for the 40 million beneficiaries under the Medicare program.

HHS Secretary Tommy Thompson expressed his support for multistate purchasing under the Medicaid Program late last month. I'm a person who likes competition, he said, adding that he envisions regional or even national drugbuying agreements in the future. (Associated Press, April 22, 2004)

The federal government has negotiated lower prescription costs effectively: Following the anthrax attacks in 2001, the government negotiated the purchase of 100 million tablets of Cipro, achieving significant savings.

Last year, during a flu vaccine shortage, the government negotiated reductions in the price of the FluMist vaccine from $46 per dose to $20 per dose, saving over 55%. Enrollment in the Medicare drug discount card program begins today. Prescription prices with the discount card, however, are still well above those seniors pay in Canada for the same prescriptions.

Joining Senators Johnson and Schumer in contacting Secretary Thompson were Senators Tom Daschle (DSD), Dick Durbin (DIL), Debbie Stabenow (DMI), Barbara Boxer (DCA), Jack Reed (DRI), Edward Kennedy (DMA), and Mark Pryor (DAR).

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